Petrobras’ Gas Utilization Optimization Program

(POAG-2015)

Denis Krambeck Dinelli

Petrobras’ Domestic E&P Gas Production Planning

2nd WOC1/PGCA Meeting

Rio de Janeiro, Brazil

18-21 February 2013

Summary

1. INTRODUCTION: PETROBRAS’ E&P HIGHLIGHTS

2. GAS FLARING: PROBLEM DIAGNOSIS

3. POAG 2015 – GAS UTILIZATION OPTIMIZATION PROGRAM

4. RESULTS

5. NEXT STEPS

6. CONCLUSIONS

1. INTRODUCTION: PETROBRAS’ E&P

HIGHLIGHTS

Petrobras’ E&P Highlights (2011)PROVEN RESERVES (31/12/2011)• SPE

– 15.7 billion boe

– 395 bcm natural gas

– R/P 19.5 years

– Reposition index 153%

• SEC

– 12.2 billion boe

– 293 bcm natural gas

– R/P 15.2 years

– Reposition index 115%

PRODUCTION (2011)• 2.376 Mboepd

• 2.022 Mbpd oil

• 64 Mm3/day natural gas

Proven Reserves (2011)

16% 5%

36%43%

Proven reserves 31/12/2011 (SPE)

(15.7 billion boe)

proven reserves developedproven reserves undeveloped

< 22 °API

(heavy)

gas > 31 °API (light)

22 – 31 °API

(intermediate)

84%

4%12%

40% 60%

associated gas

non-associated gas

oil and ngl

31,7 35,3 35,2 36,3 39,0 39,2 38,5 41,2 45,8 46,0 44,9 46,5

6,67,3 7,9 9,3

9,0 8,8 10,8

17,4 11,415,3 19,1

22,8

38.342,5 43,1

45,648,0 48,0 49,3

58,5 57,361,3

64,0

69,3

0

10

20

30

40

50

60

70

80

mill

ion

m³/

d

ASSOCIATED NON-ASSOCIATED

Natural Gas Production

16,4

20,321,9

24,3 24,5 24,8 24,7

32,2

25,8

32,1

37,0

43,1

0

5

10

15

20

25

30

35

40

45

50

mill

ion

m³/

dDomestic E&P Supply

2. GAS FLARING: PROBLEM DIAGNOSIS

Production, Flaring and Utilization Index: 2004

Production, Flaring and Utilization Index: Evolution 2004 - 2009

26% increase in natural

gas production

121% increase in

flaring

Production, Flaring and Utilization Index Evolution 2004 - 2009

WHY?

Production, Flaring and Utilization Index2009 Diagnosis

“OLD” PLATFORMS

COMISSIONING OF NEW PLATFORMS

HOW TO IMPROVE?

• A multi-disciplinary study group was formed to:– study the causes;– make a diagnosis;– propose an Action Plan for flaring reduction.

• Case studies were classified into three groups:

• Focus should be on Campos Basin.

1Facilities already under construction that could be modified without major changes in their startup time

2Facilities already under construction in which modifications could strongly impact their startup time

3 Operating facilities with high flaring rates and low gas utilization ratio

Gas Utilization Optimization Program:The Beginning

Campos Basin Infrastructure

3. POAG 2015 – GAS UTILIZATION

OPTIMIZATION PROGRAM

• Program planned during 2009, based on the Action Plan developed bythe multi-disciplinary Study Group;

• Approval and patronage of E&P’s Executive Managers:– E&P Corporate– E&P Engineering– E&P S-SE

• Implemented from January 2010;

• Basic contents:– Directives for the approval of new production facilities;– Retrofits and actions to reduce gas flaring in operating platforms;– Flare monitoring on a weekly basis;– Monitoring of facilities under design or construction on a monthly basis;– Gas flaring reduction goals from 2010 to 2015.

POAG 2015:Gas Utilization Optimization Program

88.0% 90.0% 90.0%92.0% 93.0%

95.0%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015

Gas utilization index

POAG 2015 - Initial Goals

POAG 2015:Strategic Directives

NEW PROJECTS SHOULD NOT REDUCE THE UTILIZATION RATI O OF OPERATING FACILITIES (e.g. platforms, collection stations)

RAISE GAS UTILIZATION TO INTERNATIONAL BENCHMARK LE VELS

GAS UTILIZATION AND OIL PRODUCTION CANNOT BE AFFECT ED BY DEMAND FLUCTUATIONS

AT STARTUP NEW PLATFORMS MUST ABIDE TO THE STRATEGI C DIRECTIVES SET FOR GAS UTILIZATION AND EXPORTATION

SECURE A MINIMUM

UTILIZATION RATIO OF 97% IN

NEW PRODUCTION

FACILITIES

GROUP 1

SECURE A MINIMUM

UTILIZATION RATIO OF 95% IN

NEW PRODUCTION

FACILITIES

GROUP 2

SECURE A MINIMUM

UTILIZATION RATIO OF 95% IN

PRODUCTION FACILITIES THAT

FLARE MORE THAN 80,000 m3/d

GROUP 3

• POAG directives for new platforms (comissioning, critical equipments, design, etc.) • Directives for process operation and machine maintenance • Dissemination of best practices• Communication plan for the work force

• Standards for new platforms (comissioning, critical equipments, design, etc.)• Standards for process operation and machine maintenance

POAG 2015:Analytical Structure of the Program

Program Structuring

Governance Implementation

Ellaboration of Program Description

UO-BCSub-program

UO-RIOSub-program

Program Planing

Monitoring of Case Studies

Selection of Projects from Case Studies

Cost and Benefit Management

POAG 2015

Project ExecutionExisting Systems

UO-BCSub-program

UO-RIOSub-program

UO-ESSub-program

UO-BSSub-program

Monitoring of Projects

Management of the Bank of

Opportunites

Project Audits

Risk Identification and Treatment

Working Systems

New Systems

Risk ManagementMonitoring of Operations

Technical Studies and Operating Procedures

• Utilization ratio of 97% in new platforms

• P-35• P-18• P-26• PCE-1• P-15• P-20• PGP-1• PNA-1• P-19• PCE-1•North-South Pipeline

• P-40• P-50• P-51• P-53• P-54• FPSO Cid. Niteroi

• PNA-1 injection compression• Relocation of P-12 compression• Namorado gas ring• ICS P-18

• South-North Pipeline• Capixaba / UTG Sul Capixaba• P-57

• P-56

• FPSO Cid. Angra dos Reis• FPSO Cid Santos

E&P-CORP/EGP/PPG E&P-ENGP/DP/PGPE&P-PDP & OUsOUs E&P-CORP/EGP/PPGE&P-ENGP/DP/PGP E&P-CORP/EGP/PPG

E&P-ENGP/OPM & OUsE&P-ENGP

Standardization

Knowledge Dissemination

Knowledge Management

E&P-PDPSub-program

• FPSO Cid Anchieta• P-58• P-55• P-62• FPSO Cid Itajai• P-61• P-63• FPSO Cid Paraty

Project ExecutionNew Systems

E&P-CORP/EGP/PPG

Risk Management

Objectives: Assure transparency and periodicity in the distribution of information concerning the evol ution of the program; support decision makers of all levels with real time monitoring of t he physical progress achieved in the projects, in a structured and organized manner.

POAG 2015Governance Model

Technical Monitoring

Level 3 Monitoring

Biannual

Bimonthly

Resp: Executive Manager II

MonthlyProgram Vision

Strategic Vision II

Project and Case Study Vision

Corporative Monitoring

Resp: POAG Coordinator

Monthly

Resp: Sub-Program Coordinators

Internal Meetings at Internal Meetings at Operating Units

Level 4

Resp: Director

Operation Monitoring

Strategic Vision I

Deviations

Director Monitoring

Resp: Executive Manager I

Resp: Technical Manager

DeviationsBlocking and Corrective Actions

• Structured monitoring of the projects development was essential;

• Web-based tool used on the monthly meetings:

– Baseline vs. Projected completion date for each project;

– Projects’ activities and chronogram;

– Projected impact on the initial goals;

– Updated Action Plan, with root cause analysis for deviations;

POAG 2015:Implementation Monitoring

• Weekly reports of the flared volumes and the projections for themonth and year for the High Management, summarizing thebiggest deviations from the goals:

• Corrective actions monitoring;

• Critical factor for the success: the discipline in keeping the Program governance running as proposed was vital to communicate the importance of POAG to all involved workforce.

POAG 2015:Results Monitoring

It is for real!

4. RESULTS

POAG 2015: Production, Flaring and Utilization Index Results 2009-2012

POAG 2015: Production, Flaring and Utilization Index Results 2009-2012

19% increase in natural

gas production

58% decrease in

flaring

POAG 2015: Production, Flaring and Utilization Index Results 2009-2012

Previous record: 90,8%

(2004)

POAG 2015:Flaring and G.H.G. Avoided 2010-2012

9.3

6.6

4.83.9

0

2

4

6

8

10

12

2009 2010 2011 2012 Jan-Oct

mill

ion

m³/

day

GAS FLARING REDUCTION

Flared

If 2009’s 83,7% utilization Index had

been kept, flaring would have been…

POAG 2015:Flaring and G.H.G. Avoided 2010-2012

9.3

6.6

4.83.9

3.45.6 7.2

0

2

4

6

8

10

12

2009 2010 2011 2012 Jan-Oct

mill

ion

m³/

day

GAS FLARING REDUCTION

Flared Avoided

Gas Flaring avoided:

5,9 billion m3

G.H.G emissions avoided:

16 million tons CO2

•References:• Global Gas Flaring Reduction partners make progress,

UNIDO, June 2012• Estudo de Baixo Carbono para o Brasil, World Bank, 2010

3 million passenger cars

(15% Brazilian fleet)

5. NEXT STEPS

The Brazilian Pre -Salt

� The Pre-Salt in Brazil was the result of efforts to find new exploratory horizons in the Brazilian sedimentary basins;

� Total area of 149,000 km2, comprising the Santos and Campos sedimentary basins;

� The Pre-Salt reservoirs are, as is characteristic of carbonate reservoirs, heterogeneous, with highly variable petrophysical properties;

� Basically associated gas, in a gas-oil ratio between 200 and 300 m³/m³.

LULA

SAPINHOÁ

The Brazilian Pre -Salt� Challenges:

• reservoirs depths between 5,000 and 6,000 m below t he sea level;• extensive salt layer, with thickness up to 2,000 m;• high contents of CO2 ; • H2S in high concentrations;• flow assurance in ultra-deep waters, with low fluid temperature.

� Extended Well Tests (EWT) – 6 to 12 months

• reducing technical and geological risks;• powerful tool for reservoir characterization:

� Checking Damage mechanisms and reservoir hydraulic communications;

� Sampling rocks and fluids;� Flow assurance;� Economic potential.

HOW TO TEST

WITHOUT FLARING?

• Technological solution for transporting and monetizi ng associated and stranded

gas reserves during EWT phase;

• The compact reactors applied in GTL process represe nt a breakthrough in GTL

technology, because of their small footprint, lower weight, modular design and

high efficiency per unit of reactor volume which me et the requirements for

offshore applications.

Modular Offshore Gas -to-Liquids (GTL)

Gas-to-Flare Gas-to-Liquid

Petrobras’ FGTL R&D 2006 -2012~ US$ 90 MM

Human Resources: ~ US$ 15 MM

(200.000 h)

Infra-structure + OPEX + others:

~ US$ 75 MM

Petrobras’ FGTL: Pilot Projects

• Operating since November/2011;

• Technology has been qualified, and enhancing the

efficiency is under analysis;

• Processing 10 th m3/d of gas, producing

of 20 bbl of synthetic oil.

• Operating since December/ 2011;

• Project under revision, with new startup

on March/2013;

• Processing 3 to 4 th m3/d of gas,

producing up to 10 bbl of synthetic oil.

6. CONCLUSIONS

• Petrobras’ Gas Utilization Optimization Program allowed a growth in ourGas Utilization from 83,7% in 2009 to 94,3% in 2012;

• Key factors for POAG’s success were:– a correct diagnosis of the causes for flaring;– focused Action Plan and Strategic Directives;– High Management sponsorship for the Program;– dissemination of all the initiatives to all involved workfo rce;– structured and constant monitoring of gas flaring by all man agement levels;

• Petrobras is still searching for better and improved means o f raising itsproduction altogether with minimum gas flaring, through the use ofmodular GTL units in the EWT platforms.

Conclusions

Coordination Committee 2012 -2015

Merci!